ACA Criticizes Some Broadband Stimulus Fund Distribution

3/25/2010 4:08 PM Eastern

By: John Eggerton

The American Cable Association says that the USDA's Rural Utilities Service has been handing out broadband stimulus money to fund service in competition with its members -- small and medium-sized cable/telecom companies.

In a letter to RUS administrator and former FCC commissioner Jonathan Adelstein, ACA president Matthew Polka said the group was "disappointed" to learn that some of the grant and loan money was going to areas "already sufficiently served with broadband."

For one example, he pointed to a Jan. 25 award of over $100 million to a rural telco to provide broadband in Hays, Kan. That area, according to Polka, already receives service from Eagle Communications and "numerous other providers."

Polka said that the award process does not allow for operators to review the applications to ensure their accuracy, and said that Eagle and another provider both provided information to RUS about service that RUS "clearly" did not take into account.

Polka wants RUS to adopt a formal review process that allows aggrieved parties like Eagle to submit additional evidence, and in the meantime review all the round one applications (round two bids were due March 15) to make sure that no funding will be used to overbuild existing service.

The issue of the degree to which the stimulus program did, or did not, focus on unserved, rather than underserved, rural areas (both are eligible for money) was raised at a House Communications Subcommittee hearing Thursday by more than one legislator. They argued that broadband adoption would be further along if the government focused on the 5% of the country not served by broadband.

"I am writing today to encourage the agency to better honor the contributions of our members and others who have invested private capital to deploy broadband in their communities by not funding applicants to the RUS' Broadband Investment Program (BIP) whose proposed projects would overlap existing broadband service from these rural providers," wrote Polka.